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    28-05-2020

    Eversheds Sutherland helps develop new template for DC Chair's Statement

    Eversheds Sutherland has contributed to the development of a new template for the DC Chair's Statement for pension scheme trustees.

    The template, published today (28 May, 2020) and produced by the DC Governance Group, aims to reduce the time and costs taken to produce compliant Chair’s Statements.

    The members of the Group – all leading pension lawyers and consultants - have advised many DC schemes on the preparation of their own Chair’s Statements, and are well-versed in the kinds of technical breaches which are likely to be picked up by the Regulator.

    The Group decided to gather this learning together into a template document to bring this combined experience and knowledge to the advantage of the pensions industry, and help other schemes avoid some of the known pitfalls.

    The founding members of the DC Governance Group include:

    • Francois Barker, head of pensions, Eversheds Sutherland
    • Charlotte Feld, Travers Smith
    • Anna Copestake, ARC Pensions Law
    • Helen Ball, Sackers
    • Laura Myers, LCP (Chair)
    • Mark Baker, Pinsent Masons
    • Rona Train, Hymans

    The template is being hosted by the Pensions and Lifetime Savings Association (PLSA) and is available here.

    The PLSA is encouraging trustees and providers to use the template as a starting point for producing their own scheme-specific version.

    David Fairs, TPR Executive Director of Regulatory Policy, Analysis and Advice, said:

    “A Chair’s Statement is a basic requirement of good pensions governance and should be written clearly enough for members to understand and so I welcome any assistance provided to the trustees such as the PLSA’s drafting template. 

    “The template doesn’t remove the need for trustees to carry out the fundamental analysis forming the foundation for a chair’s statement or consider how the statement requirements apply in the case of their scheme, but it should help in collating the information needed and help to present this clearly to savers.”

    Laura Myers, Chair of the PLSA’s DC Committee, Chair of the DC Governance Group and head of DC at LCP, said:

    “This has long been a concern for trustees and that’s why I am delighted to have contributed to this template statement. It will hopefully provide a useful starting point and guide for trustees to help simplify the production time and cost on documenting their governance so they can instead focus these costs on the areas that will make tangible improvements to members outcomes.”

    Francois Barker, Head of Pensions at Eversheds Sutherland, said:

    “The legislation, regulation and guidance governing DC Chair’s Statements is overly complex and very difficult to comply with to the letter.  

    “Many schemes have been fined for minor technical breaches since the legislation gives the Regulator no latitude on fining for breaches. The result is a lot of wasted effort, time and money by many DC schemes, chasing technical compliance to the letter. This could all be put to much better use enhancing broader scheme governance.

    “We hope that our template statement will give DC schemes a real “leg-up” in terms of producing a compliant Chair’s Statement in an efficient way.

    “Although the Chair’s Statement was originally designed as a member communication document, this original purpose has been lost – partly because of the overly technical and detailed requirements in the legislation and accompanying guidance.  It is time to make the Chair’s Statement part of schemes’ technical reporting to the Regulator, and allow much more latitude for schemes to communicate what they determine to be useful information to their members in a format which they consider will be accessible.”

    Disclaimer

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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